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re: SLV - Holy Cow! Down to $17.16
Posted on 9/20/14 at 8:55 am to Iowa Golfer
Posted on 9/20/14 at 8:55 am to Iowa Golfer
quote:
I would think buying a 1/2017 $18 call for $218 is really a very conservative play. Total risk $218, theoretical profit is unlimited.
Or, you can just buy 1,500 shares at $17.13, like I did yesterday, put in a stop/loss order at $17.03 giving you a maximum potential loss (risk) of $165 including broker's commission and the theoretical upside is also unlimited.
1
Posted on 9/20/14 at 9:10 am to LSURussian
Yes. But I would factor in the increased capital needed by owning the shares. Either tie up approx $25K, or tie up $3,270 for the same potential result.
The synthetic long and long call are almost equivalent to buying the shares in this case.
Pick your poison.
The synthetic long and long call are almost equivalent to buying the shares in this case.
Pick your poison.
This post was edited on 9/20/14 at 9:14 am
Posted on 9/20/14 at 9:32 am to Iowa Golfer
Again, personal preference, but if I wanted to buy paper shares of SLV given what I believe will be future downward pressure in the short term, I'd sell weekly puts.
So if I wanted to buy 1500 SLV below $17.10, I'd sell 15 of next weeks $16.50 puts (to guard against the downward trend) and collect $115. I'd repeat this every week until the shares got put to me. If they never got put to me, I'd avoid buying while the price continued to decline, and collect ordinary income. Risk managing my potential cost basis while collecting a small weekly income for the tied up capital.
Having said this, this would make unavailable purchasing power at 30% naked margin requirement. They would call it naked, but it in effect would be cash covered. So depending on your account, the margin interest could be nil.
Also, the mere fact that puts are fetching more than calls at the same strike price is revealing, especially out as far as 2017.
A lot going on here. Specifically the London fix being fixed has certainly made swaps more volatile, and if you look at COT of the larger banks, they're doing what I am doing, albeit my way is significantly smaller and less sophisticated.
So if I wanted to buy 1500 SLV below $17.10, I'd sell 15 of next weeks $16.50 puts (to guard against the downward trend) and collect $115. I'd repeat this every week until the shares got put to me. If they never got put to me, I'd avoid buying while the price continued to decline, and collect ordinary income. Risk managing my potential cost basis while collecting a small weekly income for the tied up capital.
Having said this, this would make unavailable purchasing power at 30% naked margin requirement. They would call it naked, but it in effect would be cash covered. So depending on your account, the margin interest could be nil.
Also, the mere fact that puts are fetching more than calls at the same strike price is revealing, especially out as far as 2017.
A lot going on here. Specifically the London fix being fixed has certainly made swaps more volatile, and if you look at COT of the larger banks, they're doing what I am doing, albeit my way is significantly smaller and less sophisticated.
This post was edited on 9/20/14 at 9:37 am
Posted on 9/20/14 at 9:38 am to Iowa Golfer
Enough. College football time. Good luck LSU. I enjoy the back and forth on here. It really causes me to think through some things.
Thanks all.
Thanks all.
Posted on 9/20/14 at 10:09 am to Iowa Golfer
quote:Not a consideration for me.
But I would factor in the increased capital needed by owning the shares. Either tie up approx $25K
quote:And if the share price rises on Monday?
So if I wanted to buy 1500 SLV below $17.10, I'd sell 15 of next weeks $16.50 puts (to guard against the downward trend) and collect $115. I'd repeat this every week until the shares got put to me.
To each his own. I prefer my way, you prefer yours. That's what makes it a market.
Posted on 9/20/14 at 12:04 pm to PG
quote:
Bloomberg article months before zero hedge.
You're still wrong. That article discusses moves by central banks of other nations, not by the Federal Reserve.
Posted on 9/21/14 at 10:15 am to Iowa Golfer
Interesting observation. Hard to believe that SLV will be that low on 1/2017. The con game is going to explode and probably before 1/2017.
Posted on 9/21/14 at 11:56 am to ynlvr
You're confusing SLV with PSLV
Posted on 9/21/14 at 12:28 pm to tigerpawl
Eric Sprott is a pretty smart guy.
Posted on 9/21/14 at 3:39 pm to Iowa Golfer
Yep and he is all in on physical silver .......
Posted on 9/21/14 at 7:39 pm to PG
To be fair, he doesn't have an issue with cash, and although his fund actually owns physical silver, he does collect his investment company fee in cash.
Still, Eric Sprott, although much more bullish than me on silver, is a pretty smart guy. He took on JP Morgan, and although the CFTC gave up, he did make them sweat for a while. JPC sold their physical commodities unit but still heavily involved in futures. They made a huge amount of money, or so they say, but the timing of it all was slightly interesting.
Still, Eric Sprott, although much more bullish than me on silver, is a pretty smart guy. He took on JP Morgan, and although the CFTC gave up, he did make them sweat for a while. JPC sold their physical commodities unit but still heavily involved in futures. They made a huge amount of money, or so they say, but the timing of it all was slightly interesting.
Posted on 9/22/14 at 9:06 am to Iowa Golfer
I bought too early at $17.30 
$16.91 this morning
$16.91 this morning
Posted on 9/22/14 at 9:27 am to TigerTatorTots
quote:
I bought too early at $17.30
Yeah, I had a limit order in for 17.25 that I didn't really expect to execute any time soon. Kind of forgot about it. Then boom, got the email notification. It wasn't too much so I can avg down a little more if I want.
Posted on 9/22/14 at 9:37 am to kennypowers816
1,275 @ $16.94
Posted on 9/30/14 at 11:06 am to ynlvr
Down to $16.30 today. Any guesses at where the bottom is?
Posted on 9/30/14 at 11:19 am to kennypowers816
quote:Not to worry. I was just driving and heard an advertisement during the Glenn Beck radio program that silver will soon go to $50/ounce. They said it's a sure thing.....
Down to $16.30 today. Any guesses at where the bottom is?
Posted on 9/30/14 at 11:27 am to LSURussian
quote:
Glenn Beck radio program that silver will soon go to $50/ounce. They said it's a sure thing.....
Well duh... I'm not worried about the bounce to $50/oz. That's a no brainer. I just want to know how long I should wait to buy it. The cheaper I can get it, the more I can buy and the easier it will be for me live out my dream of being scrooge mcduck (except with silver coins).
Posted on 9/30/14 at 11:38 am to Iowa Golfer
quote:
Really though, I would think buying a 1/2017 $18 call for $218 is really a very conservative play. Total risk $218, theoretical profit is unlimited.
that does sound like fun...down to 2.00 today.
Posted on 9/30/14 at 11:49 am to kennypowers816
Posted on 9/30/14 at 12:46 pm to kennypowers816
As the dollar rumbles silver crumbles. I've dug myself a nice little hole here with SLV. Support for silver @ $16.75. If so, SLV will be close to $16.00. But will it bounce?
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